US steel capacity utilization dips to 84.9%
The U.S. steel capacity utilization rate fell slightly but remained at a healthy 84.9% for the week ending Sept. 18, the American Iron and Steel Institute reported this week.
Volatility is the name of the game. Do you have a steel buying strategy that can handle the ups and downs?
Steel capacity utilization hits 84.9%
U.S. steel capacity utilization last week fell to 84.9%, down from 85.3% the previous week. However, the rate remains up significantly from the 68.6% during the same week in 2020.
U.S. steel output last week totaled 1.87 million net tons. The total marked a 0.4% decline from the previous week.
However, steel output increased by 21.9% on a year-over-year basis.
For the year to date, production totaled 67.66 million net tons, AISI reported. Meanwhile, steel capacity utilization during the period reached 80.9%.
Production in the year to date is up 20.2% from the same period last year, when the capacity utilization rate reached 66.8%.
Steel prices inch upward
U.S. steel prices have enjoyed an over yearlong, uninterrupted rise.
With that said, month-over-month gains are nowhere near the double-digit percentage gains seen at various points over the past year.
U.S. hot-rolled coil closed last week at $1,927 per short ton, or up 2.39% month over month. Meanwhile, cold-rolled coil continues to trade at a premium to HRC, closing last week at $2,136 per short ton. CRC is up 2.3% month over month.
Hot-dipped galvanized closed at $2,240 per short ton, up 2.56%.
However, as Maria Rosa Gobitz noted earlier this month, the Raw Steels Monthly Metals Index (MMI) declined for the first time in 14 months. The index decline came largely as a result of falling U.S. scrap and Chinese steel prices.
Ongoing automotive shutdowns stemming from semiconductor shortages continue to have an impact on steel demand from that sector.
U.S automotive inventory fell to 136,700 in July, according to Federal Reserve Bank of St. Louis data. The total marked a drop from the January 2021 level of 427,700.
Light weight vehicle sales fell to a seasonally adjusted annual rate of 13.06 million in August. The rate has declined significantly from its 2021 peak of 18.30 million in April.
Many may be wondering how to set buying strategies for 2022 with so many variables in the air. The old saying goes, “Nothing kills high prices like high prices” — but does that still hold true?
For more on the subject, check out the September episode of “Spend Friends,” which features special guest Lisa Reisman, CEO of MetalMiner (a sister site of Spend Matters).
I appreciate the update. Hurricane season started today and I still don’t have my new roof.